SCM/ Logistics, especially the front end for eTailing needs a paradigm shift from product handling to Customer Delight.

1. Home Delivery – The Last Mile
Spectrum 2015
21st Feb 2015
V Rajesh
Retail Expert, Consultant & Trainer

2. http://bit.ly/vrajesh
"The More Things Change"
The More Things Change the more they stay the same
The more things change the more the stay the same
- Bon Jovi
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• Shopping from Home
– Telephone Vs Online
• Range
• Availability Vs Width & Depth
• Home delivery
– Immediate Vs Same day Vs A few days
• Payment
– Rotating credit Vs CoD/ Credit Cards
• Customer confidence and relationship is still
core to business

3. http://bit.ly/vrajesh 3
Basic Retail Model
A differentiated store
“Product”
A major
offering of
Appropriate
yet
Differentiated
Assortment
“Target
Customer”
Offer Better Value
Value is not equal to Price!
“How”
“Execute in
Line”
Delivering an
“Experience”
which beats
customer
expectation.

4. http://bit.ly/vrajesh
E-Tail – Value Proposition
• Convenience
– Access, Selection, Reference, Information, etc.
• Wide & Deep Choice or Hard to Locate/Find
– Extensive range, Rare products, Second hand, etc.
• Price
– Price arbitrage, Auctions, Reverse auctions, etc.
Service is a hygiene factor

5. http://bit.ly/vrajesh
E Tail - Environmental enablers
• Shopper
– Value seeking and Wants to simplify life
– Increased use of internet and Smart phones
– Discretionary shopping Vs Functional shopping
• Customization & Me-Tail
– Mobile population; Long term relationship with shop owners is not
relevant.
– Urban explosion; Traffic & Distance
• Technology
– Smart phone penetration
– Increasing band width and net access
– Technology that enables SCM and customer connect
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Business Reality
• Cost impact
– Is discounting a viable long term strategy?
– Real estate Vs cost of fulfillment
• Front end logistics is a key driver
• Categories with lower fulfillment costs and/ or low price sensitivity have
higher chances of success
– People cost
• Is there enough focus on this?
• Revenue
– Margin structure in India
• Can market place model leverage volumes?
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Customer Expectations
• Functional
– Accuracy
• On time
• As ordered
– Basic assistance
• Change
• Wait if required
• Answer queries
– Polite
• Service/ Interaction
– Face of the E-Tailer
• Responsive
• Resolve doubts and
issues
• Help if required
• Inform
• If required, educate
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8. http://bit.ly/vrajesh
Changing paradigm for SCM/ Logistics
• Traditional
– Minimal inventory with
maximum fill rates
• DC/ Warehouse
management
– Lean systems and JIT
– Picking & Dispatch
• Logistics/
Transportation/ Delivery
– Scheduling
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• Emerging
– Customer delight
• Picking & Scheduling in
line with commitment
• Predictive picking
• Customer Communication
• Managing variances and
uncertainty
• Managing the customer
interactions
SCM today needs to become customer centric

9. http://bit.ly/vrajesh
People Dimension
• People profile changes dramatically
– This is not like courier delivery
– Is outsourcing a long term solution
• Training needs to be multi faceted
– Technology, Material handling, Cash management, etc
– Safety
• Reward & Recognition can be challenging
– Internal benchmarking needs to change
• Systems and processes that enable customer delight.
– Trade off with control mechanisms
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10. http://bit.ly/vrajesh
Cultural Dimension
• Customer Centricity is not one department’s KRA
– Is the organization structure customer centric?
– Are the systems and processes aligned?
– People are CORE
• Walking the talk
– Does the organization live up to its promises?
• To the customers!
• To their people
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11. 11
SCM needs a
paradigm shift from
product handling to
Customer Delight!

12. Think like a shop keeper
and operate like a
Retailer
- Thank you